Much buzz on how to upset an industry, or two! Updates today on changes afoot in both real estate and publishing, and two very different competitive responses. Last week, in real estate...Tech Crunch announced another hefty capital raise and expansion into New York by 42 Floors, the “AirBnB for commercial real estate” that has the potential to re-define how leasing office space works. 42 Floors aggregates listing data directly from landlords, adds glossy images and lets users search for their “dream” space by type: traditional office, co-working, sublets and executive suites. The model is disruptive to the current industry structure, in that it reaches a dramatically under-served slice of the market: spaces traditionally too small and unprofitable to be worth a broker’s time. And yet, as noted repeatedly in the comment sections of Friday’s TC post, rather than displace brokers, the service has the potential to enhance their role and bring in new customers. How? By eliminating costly, time consuming deal sourcing and enabling brokers to focus on the value-added conversations, context and negotiations that still require a human touch. Listing agents seem to be loving this, and are right to embrace a new technology that improves the tenant’s decision process. While 42 Floors is starting small, there’s no reason this same benefit won’t apply for larger, higher-margin spaces. Opacity is often aggressively defended as a competitive advantage in real estate, but it can also unnecessarily limit the pool of viable transactions. As documented in a great profile in Inc. earlier this year, 42 Floors has responded to this by continually evolving its business model so that it works for all parties involved. In its current iteration, it is just one of a number of firms creating opportunities for more and better deal flow through greater transparency and, most importantly, making the user experience a little less painful. Next - who will do this right for investment sales??

Bezos: "The Ultimate Disruptor", Forbes

And today, in publishing... Tim Ferriss will launch his newest book, The Four Hour Chef, his first venture on the Amazon publishing label. Ferriss has done phenomenally well in the past, his Four Hour Work Week and The Four Hour Body are still on the New York Times bestseller’s list. If he makes it again, his will be the first uncontested, mainstream success for Amazon publishing. Other authors view Ferriss as a test case and may follow suit, favoring Amazon over traditional publishers. Bricks and mortar bookstores like Barnes & Noble are so agitated by Amazon’s encroachment into publishing, that they have banned Four Hour Chef from shelves nationwide. The threat is real. However, it is worth noting that Amazon has gained momentum because it provides a better experience and a more valuable service to both readers and authors at many points in the process. Victoria Barnsley, chief executive of HarperCollins UK, told the BBC this week that Amazon’s entry into publishing “is obviously a concern,” due to its increasingly monopolistic position, but added that the firm was both enemy and friend: “They are also a very important customer of ours and they have done fantastic things for the book industry.”

Just last week, Forbes rated Jeff Bezos of Amazon the Business Person of the Year, calling him “The Ultimate Disruptor.” Reporters routinely attribute his success - hopefully by now this comes as no surprise - to an unfailing, even “zealous” focus on customers, a hawk-like attention to how much it costs to serve them, and willingness to use unconventional means to deliver what they want.

As such, a purely retaliatory response may not be the smart choice for retailers. As Victor Cheng points out in a detailed breakdown of the chess moves unfolding today, a better long-term play would be to figure out profitable ways to offer something even more valuable to both authors and readers. What’s next: See this thoughtful follow-up article from George Anders at Forbes, noting among other things: a future for Amazon in a proprietary phone and expansion into web services, moves we've been anticipating for quite some time. If this is comes to fruition, South Lake Union office valuations may hold strong a little longer.

The moral of these storiesDefensible growth begins and ends with focus on the customer and the ability to deliver something truly valuable, in a way that is cheaper, more convenient, and easier to access. With all respect, this kind of service-orientation is much more prevalent in tech and consumer products than the older, higher-friction industries of real estate and publishing. Perhaps because the barriers to entry have been greater and information less accessible, transactions have traditionally been fewer and further between, or maybe because consumers simply haven't demanded higher performance... yet.However, even in these venerable industries, when the inevitable happens - and someone comes along to do what's always done - better, it would be worth studying, to continue improving, or just to survive. Resistance without offering a better solution is not recommended.